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What Liability-revenue relationship exsts with an unearned revenue adjusting entry?
Wiki User
∙ 14y ago
If I understand your question correctly, you would like to know the relationship between unearned revenue and liabilities? Unearned revenue is something given to you for nothing. For example, cash given to you in advance for 6 months of services. You now have a liability because you OWE someone a service. Just like when you borrow money from the bank, you OWE them the principal and interest at the date of maturity.
This is what the journal entry would look like:
Client gives you $6,000 for 6 months of services
Cash $6,000
Unearned Revenue $6,000
Once you complete the first month of service, you can then reduce Unearned Revenue
Unearned Revenue $1000
Revenue $1000
Just remember, you dont record revenue until you EARN it.
Wiki User
∙ 14y ago
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What Pairs of accounts could not appear in the same adjusting entry?
service revenue and unearned revenue
If an adjusting entry were not made at the end of a period to remove the earned revenue from the unearned revenue account?
That would mean that the liabilities would be understated.
Unearned revenue is a contra revenue account?
Unearned Revenue is a Liability Account
Unearned revenue is initially recognized with a?
credit to unearned revenue
What kind of account is unearned revenue?
Unearned Revenue is a liability account.
A liability revenue relationship exists with?
unearned revenue adjusting entries
What Pairs of accounts could not appear in the same adjusting entry?
service revenue and unearned revenue
If an adjusting entry were not made at the end of a period to remove the earned revenue from the unearned revenue account?
That would mean that the liabilities would be understated.
Unearned revenue is a contra revenue account?
Unearned Revenue is a Liability Account
Unearned revenue is initially recognized with a?
credit to unearned revenue
What kind of account is unearned revenue?
Unearned Revenue is a liability account.
What could be journal entries for unearned revenue?
Initial receipt of unearned revenue from a customer for service to be provided in the future. Recognition of the unearned revenue as the service is performed and earned. Adjustment entry to reflect the portion of unearned revenue that has now been earned.
What type of account is unearned revenue?
Unearned Service Revenue is a Liability account.
What is the entry unearned revenue?
[Debit] Cash / bank [Credit] Unearned revenue
What types of industries have unearned revenue?
Industries that have unearned revenue are nonprofit agencies like UNICEF. Another industry that has unearned revenue is the Internal Revenue Service of the United States.
What is the equation once unearned revenue has been earned?
[Debit] Unearned revenue [Credit] Sales revenue
What is Unearned fees and unearned revenue?
Unearned fee and unearned revenue is that amount which is received from client in advance but actual services are not provided yet to client.
